Acacia Mining’s output continues to drag amid Tanzania export ban but tops expectations

Acacia Mining’s output dropped in the fourth quarter of 2017 due to an ongoing dispute with the government of Tanzania, but the firm still managed to beat its revised expectations.

Shares in the London-listed firm were up just over one per cent to 196.5p at the time of writing.

Gold production in the three months to the end of December fell by 30 per cent from the previous year to 148,477 ounces. This was down 22 per cent from the quarter before, and it brought total 2017 gold production to 767,883 ounces, ahead of its expectation of 750,000 ounces.

The company’s cash balance stood at $81m (£59m) at the end of December after a $15m outflow in the fourth quarter due to the cost of reducing operations at its Bulyanhulu mine.

In September, Acacia said it would shut the “unsustainable” mine due to Tanzania’s ban on exports of gold and copper concentrates, which was introduced in March 2017 and had cost the company $210m at the time.

The firm’s all-in sustaining cost of producing an ounce of gold fell to $779 per ounce compared with $952 per ounce the previous year.

Acacia has also been locked in a row with the government over allegations it understated gold shipments, which Acacia denies.

Peter Geleta, interim chief executive of Acacia, said the firm is “continuing to support efforts towards achieving a negotiated resolution with the Tanzanian government”.

“We look forward to providing guidance for the year in our preliminary results in February,” he said.

In October, Acacia’s parent company said it expected to finalise a deal with the Tanzanian government to lift the ban in the first half of 2018.